A sustainable development assessment of Indonesia’s state banks financing for the industrial and non-industrial sector

ABSTRACT

Global warming has adversely affected the environment and other living aspects. In addition to being a result of increased industrial and non-industrial sector activity, state bank financing aimed at both sectors can provide positive contributions to sustainable development index while also providing a negative impact. This paper results revealed that although state bank financing provides a proportion of approximately 15% and 5% for all sectors with no long-term relationship, results from IRF formative analysis can discover which sector financing still lacks sustainable development behavior. Furthermore, IRF reflective analysis in this study completes the explanation that the index can reveal financing that is ready to support sustainable development. Finally, this research findings show that sustainable development policies and regulations are not the sole determinants to implement sustainable strategy initiatives. However, access to institutional financing, sufficient short-term financing, and technology availability will encourage Indonesia’s sustainable development financing strategy.

KEYWORDS:

• Sustainable index
• sustainable financing
• VECM
• IRF

Acknowledgements

This research completion was supported by the Beijing Institute of Technology and Universitas Mercu Buana. Thank you to Dan Cudjoe and Dudi Permana for their assistance in preparing and improving.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research completion was supported by the Beijing Institute of Technology and Universitas Mercu Buana.